Treasury Secretary Janet Yellen stated on Monday that the debt-limit agreement passed by Congress last week will allow the government to continue paying its payments until December 3.
Ms. Yellen stated in a letter to Capitol Hill leaders that the agreement "provides just a temporary relief" and encouraged Congress to take additional steps to assure that the government can continue to borrow money.
“It is imperative that Congress act to increase or suspend the debt limit in a way that provides longer-term certainty that the government will satisfy all its obligations,” she wrote.
President Biden signed a bill lifting the debt ceiling by $480 billion that had been adopted by the House and Senate along party lines on Thursday.
The bill was based on Senate Minority Leader Mitch McConnell's (R., Ky.) proposal to temporarily allow the government to borrow money. While the law was approved along party lines in the Senate, 11 Republicans joined all 50 Democrats to end a filibuster and allow the Senate to contemplate an up-or-down vote.
Congress is required by law to set a borrowing ceiling for the government. Raising the debt ceiling does not enable additional spending; instead, it allows the government to meet current obligations, such as mailing Social Security checks and paying debt payments.
If Congress fails to raise the debt ceiling, the government will be forced to withhold payments to beneficiaries or postpone interest payments, resulting in a government default.
Voting to raise the debt limit has become a political battleground in recent years, as Democrats and Republicans disagree on how much the government should spend. Republicans have attempted to exploit debt-ceiling votes to force cuts to government programmes.